2024 full year sales for Brunswick Corporation are expected to be down 10% as the 2024 US marine retail market continues to underperform compared to initial expectations.
As the corporation releases its 2024 second quarter financial results, high interest rates and the pressure on consumer budgets are being blamed for lower than anticipated sales.
“The introduction of new model year products at the beginning of the important month of June did not catalyse boat purchases as we had anticipated, and our second quarter results were slightly below expectations,” said Brunswick CEO, David Foulkes.
“With significantly slower retail sales in the peak sales months, we now expect full year retail unit sales to be down approximately 10% versus our original forecast of flat.”
But despite the contraction in sales, Brunswick says it has continued to gain market share, particularly in outboard engine sales.
In addition, Propulsion’s controls, rigging, and propeller product category had a strong quarter with operating margins ahead of the same period in 2023.
Compared to the same period in 2023, the Propulsion segment saw a 21% decrease in sales with the Engine Parts and Accessories segment seeing a 2% increase in sales.
Products business sales were up 7%, and Distribution business sales were down 1%.
It is evident that the 2024 US marine retail market is underperforming in peak season.
David Foulkes, Brunswick CEO
Navico Group segment reported a sales decrease of 8%, primarily driven by reduced sales to marine OEMs and the Boat segment reported a 23% decrease in sales resulting from softer wholesale orders, as its channel partners continued to order cautiously.
Freedom Boat Club had another strong quarter, contributing around 10% of segment sales.
“With the majority of the retail selling season behind us, it is evident that the 2024 US marine retail market is underperforming in peak season versus our initial expectations and is likely to end the year at unit levels similar to 2010,” continued David.
“The macro-economic environment remains uncertain, and while there is now a higher probability of interest rate relief beginning in September, this would occur after the main selling season and will likely have an immaterial impact on our 2024 results, but potentially provide a tailwind for 2025.
“In this environment, our OEM customers and channel partners continue to order cautiously, and we do not now foresee this pattern changing significantly through the remainder of this season.”
And he said that throughout the remainder of 2024, Brunswick will continue to launch new products to support future share gains while focusing on delivering year-end inventory.
